July 31, 2023 (MLN): The Securities & Exchange Commission of Pakistan (SECP) has released a Diagnostic Study providing a holistic synopsis of the existing landscape of motor third-party insurance in the country, said a press release issued today.
The objective of this study is to present an in-depth overview of the legal framework applicable to motor third-party insurance, the current state of motor insurance, impediments in implementation and enforcement, recent initiatives taken by SECP, and a way forward containing recommendations.
This study is intended to serve as a starting point for discussion and collaborative action planning on the implementation of Motor third-party insurance among key stakeholders, including central and provincial authorities, SECP, and the insurance sector.
As per this study, motor insurance coverage in Pakistan is merely 3%, which is way lower compared to other major countries within the region.
The current status of motor third-party insurance in Pakistan demands immediate attention.
To increase motor insurance coverage and implement existing mandatory motor third-party insurance, the study provides policy recommendations for a multifaceted reform agenda.
The initiation point has to be the effective implementation of the existing laws while at the same time galvanizing the process of amendments to the Motor Vehicles Act of 1939.
The study is the outcome of extensive data collection and consultations with insurance companies through the Insurance Association of Pakistan.
